Leading in the digital world

In order to start successfully in the market, a new company needs a brilliant idea. A statement that is full of energy and needs to be constantly refired in established companies. If a company notices too late that it has lost its innovative strength, it can in the worst case lead to the company’s downfall.
If we currently look at the automotive industry with its diesel debacle, misdirected innovation can even lead to the demise of an entire industry. Of course, many other factors contribute to the emergence of such tragic developments. But what can be said to determine whether a company has already lost its innovative strength or even better, is beginning to lose its innovative strength.

Yes, leadership is facing a paradigm shift, as Prof. Peter Kruse very clearly illustrated in an interview with managerSeminare editor-in-chief Nicole Bußmann at the “Zukunft Personal” trade fair in Cologne in September 2013.

At the latest when the margins from product sales and services collapse, the management becomes brightly awake. But then it may already be too late for these product lines, the services or even for the entire company. Then all those affected ask themselves, how could it have come to this at all? Our strategic planning, the marketing department and our sales department all measured the pulse of the market together and made continuous adjustments! And yet now this crisis!

Now, in order to examine this complex, we have to take a closer look at today’s management controls and the resulting power relations and actions in companies.

In order not to complicate the approach unnecessarily, I would like to concentrate on only two elements of top management.

Case 1
The top managers of large companies usually meet annually for a strategy conference. The strategies worked out by the management levels are adopted in order to implement them in all levels of the company.

Case 2
These strategy guidelines are then subject to regular monitoring (mostly quarterly) in order to be able to initiate immediate corrective action by top management in the event of deviations.

You will say to yourself, well, this has always been the case and everyone is prepared for it and somehow it works. And if not? Everyone can imagine the answer.

Let’s look at case 1, the annual strategic planning:
With all these decisions in top management we always forget that a company consists not only of the top managers and the management levels below them, but also of employees with an inexhaustible potential for creativity, which also wants to be nurtured and nurtured.

But hand on heart, to what extent has this potential for creativity contributed to strategic planning?

To use an analogy, the strategy is supplied with a universal fertilizer, but continuous industry-/ product-specific fertilization is dispensed with.

Let us consider case 2, the “quarterly” monitoring:
If necessary corrective measures are then to be taken, only the management level, which has introduced the strategy, can decide on these corrections according to case 1. Now the employees are involved again to work out correction proposals. But what about their motivation and creativity, which now have to pay for something that they themselves are not responsible for. On the contrary, perhaps the employees had already brought in creative ideas in advance that were not even considered?

This simple example makes us aware of the waste of creativity potential we can afford in companies.

But how do we get out of this loop?
With the power of new ideas that a modern corporate culture generates, the likelihood that such companies will be more successful also increases.
Of course, innovation is cultivated in companies, but why does the saying “If our company knew what it knows” hold true in larger companies?
Thus, the innovative power of an organization can also be used as a KPI to provide information about its inner state.

Companies can be compared to human brains in this respect. We will always find a meager selection of ideas when there is a lack of curiosity, enthusiasm and creative drive. Just as there are brains in which communication between the two halves of the brain is disturbed, there are also companies with corresponding blockages between hierarchical levels or even within a hierarchical level. The brain is then based on a disease-related circumstance, while in companies it is often due to a crusted management structure. But even such companies can survive longer periods of time, but there is the greatest danger if socially dynamic processes require companies to adapt just as dynamically, creatively and innovatively.

Companies that want to remain successful in the long term must cultivate their “adaptive brain”, the potential of their employees through trial and error, gain experience, develop flat, strongly networked structures that can constantly adapt to changing conditions. You need self-optimizing, communicative networking within and between the organizational levels. The highest warning level is called for modern companies when the term “clay layers” appears in the company.
Like the brain, employees in companies thirst for new challenges. In order to do justice to this as a company, optimal conditions must be created to give this thirsty food. In order for employees to develop this spirit of innovation, they need the necessary framework conditions. For example, Google has for some time now included in its employment contracts that 30% of working time is free to innovate creative ideas.

Creativity has not yet been sufficiently researched scientifically, which is why I prefer to talk here about potential development and some neurobiological prerequisites and external conditions can now be described that positively influence this potential development.
Biologically as well as neurobiologically, we are not optimized for the processing of routines, but for the solution of occurring problems. This is a highly desirable characteristic in companies. The extremely successful introduction of Lean Management is also based on this insight. In order to create new networks of our nerve cells in the brain, they need to be constantly lit so that they do not atrophy or even dissolve irrevocably. Continuous new challenges, on the other hand, expand their networks and enable a continuous expansion of potential. This process is drastically counteracted by routine processes. These routine processes need to be discovered in order to avoid them by relocation or even better to replace them by automated processes.
So we humans need problems that present us with real challenges. I well remember running a management training center and trying to get experts who had never done any training before as trainers. They all found their first assignments, of course accompanied by experienced trainers, a huge challenge. But it was wonderful to see how this challenge positively influenced their personality development. If our brain is confronted with such a challenge, excitements arise in its complex nerve fiber networks, which spread to deeper older areas of the brain and trigger emotional activations there. It is important to use this key because our brain begins to develop solutions in order to recapture these emotional excitations.

Solution potentials are the result of new combinations of knowledge that has already been stored.
The search for solutions is most productive when as many stored knowledge elements as possible are activated at the same time. This has been scientifically proven with imaging techniques (MRT) that in the brain of a creative person who is just following a thought or solving a problem, many distant neural networks are activated at the same time. Knowledge content previously stored in separate areas is thus simultaneously called up in order to reconnect this content with each other by reactivation.
Creativity primarily means not inventing anything new, but linking what already exists in a new way. This also means, however, that those who do not know much can only become creative within the already stored knowledge. In the opposite case, it can be seen that much knowledge learned by heart is absolutely no guarantee for special creativity. In order for a successful finding process to succeed in the search for solution potentials, it requires as rich a spectrum of different experiences as possible and a preference for the try and error method in order to continuously use this stored knowledge for new connections (solutions).

Good ideas work like drugs in the brain
In the case of failed solutions, the nerve cell interconnection that led to this solution is “burned” into the brain as a new experience. For this to work, a lot of electrochemical processes in the brain are set in motion (not least, the reward system is also activated), so that we can “always” remember it. The emotional centres in the limbic system of the brain are also activated, so that a state occurs for a short time as if one had taken a small dose of heroin and cocaine.

We also know this from marathon runners or other athletes, who, the more often you experience this condition, develop a greater inner willingness to optimize your performance and with us to discover and shape. The younger our brain is, the stronger this willingness is, because not so many learned taboos or social restrictions complicate the process. The earlier this creative freedom becomes in the course of life, the lower the danger of thinking only in well-trodden paths. With aging, the willingness to engage in something new dwindles for the reasons mentioned. But if the right framework conditions are created with incentives, this innate quality can be reawakened. Unfortunately, the leadership systems of the 70s and 80s drastically worsened these incentives in working life.

Executives developed into masters in suppressing creativity

Wherever the optimization of resources is in the foreground (we remember that mankind is not aligned by evolution to monotonous processes that always run the same way), where fear/bullying is stirred up, pressure is created, precisely controlled, where thinking is rejected and responsibility is not transferred, the creative potential of employees is crushed and suppressed. This destroys personal commitment, flexibility, creativity, due diligence and a sense of responsibility, and atrophys much faster than many managers want to perceive.

This sets a three-stage process in motion:

1. Habit and idleness make our curiosity system desolate

From childhood to puberty there is usually enough to discover, experience and successfully shape. Adults start their professional life with a more or less large “surplus” of drive, curiosity and confidence. However, if this potential is not sufficiently nurtured, it initially leads to what is known as “letting it run into the void”, which increasingly turns into a frustration attitude and ends in resignation. At best (for both parties) this employee leaves the company. If the necessary growth impulses are denied to the curiosity, drive and reward system at such an early stage, they atrophy. Without a strenuous and costly new development of the desire to discover and to participate, such employees will not deliver great contributions to creativity and your commitment to the company will be reduced to a minimum.

2. Fear and activation of the stress system

Insecurity creates fear. Anxiety not only activates complex electrochemical processes in the brain, but also creates psychosomatic and more or less severe physical impairments.
Actually, fear is an emergency reaction system that secures survival. The enormous excitement in the associative areas of the neocortex means that in states of anxiety and stress no complex, action-guiding actions are more active. The respective behavioural reactions are then determined by the archaic emergency programmes in the brain stem activated under these conditions: Attack, Escape or Solidification. It goes without saying that under these circumstances creative problem solutions are appropriate.

For example, a project is getting out of hand.
First false reaction of the management, shorter reporting periods even before the causes have been clarified correctly.
Long overdue resources are made available immediately, regardless of whether they are still relevant at the current point in time.
The real tragedy is that for the first time it remains in the balance whether the project manager will be dismissed or not!
All these measures together only increase the fear of those affected and the management pretends to find a false solution so that it does not make itself vulnerable. Managers in companies are required to act immediately. Whether the actions were successful or not is rarely checked, because enough whipping boys have already been identified from this point on, in most cases.

3. Resignation by suppression of the motivation system

No employee can be motivated to develop his or her creative potential by instruction or order. Invite, encourage, perhaps even inspire employees, in accordance with Antoine de Saint-Exupéry’s aphorism.
“If you want to build a ship, don’t drum up men together to procure wood, assign tasks and divide up the work, but teach men to long for the vast, endless sea.
The desire to think and shape cannot therefore be ordered or ordered. What managers achieve faster and more sustainably is the suppression of this desire. The human brain is capable of learning throughout its life and adapts its internal organisation to the way it is used. How and for what purpose employees use their brain depends on their own experiences, which are implicitly anchored in a meta-level, the frontal brain, as inner attitudes and postures. If employees experience that they are not given any responsibility, that their work is insufficiently valued, that they are even scared or put under pressure, then this leaves traces in their brain. In the first step you are frustrated and if there is no way out, resignation begins to spread. This makes desire, commitment and creativity fit.

Many executives, however, are still convinced that pressure and fear are the most efficient methods to get maximum performance out of employees at short notice. But the principle only works as long as the pressure is maintained. At some point more and more pressure, like squeezing out a lemon, becomes necessary. This also becomes more and more strenuous for the pusher. The

Pressure and anxiety feelings are associated with certain excitation patterns in the brain. And because all the networks that are activated there at the same time are also linked to each other and connected to each other, only one thing can inevitably emerge: a negative emotional occupation of everything that has to do with the performance generated by pressure.

This even inevitably leads to employees getting sick when they have to go back to work in the morning, see their boss or just think about work.
Because bad experiences inevitably burn themselves into our brain!

The drastic consequences: Rising sick leave, constantly increasing friction losses and unmotivated, discouraged, resigned employees who are only focused on their own well-being, no interest in any change. Once such an attitude is established, this area may have to be completely reorganized, because through arguments, teachings, punishments and training, no more changes can be achieved, not even with rewards.

Rewards – also a popular management tool
Rewards also need to increase over time. In these spirals of rewards and threats, it is not only the potential of the employees that is atrophied. The managers themselves are also rubbing themselves out. Only one thing helps to escape the spiral and transform negative attitudes into positive ones: an art of leadership that invites and encourages employees to new experiences (“the executive as coach”).
The most important potential of a company is therefore not the employees per se, but those managers who are able to support their employees in developing their potential, inspire them and awaken in them the corporate spirit as a creative force that is characterized by a sense of belonging and willingness to perform. In a supportive management system, employees develop the necessary self-discipline on their own to do their job well. They think and shape, show team spirit and creativity. The manager then also has time to take care of management issues in order to bring the company forward. But these new leaders will not fall from the sky, but these talents must be discovered and awakened. And initially in their own heads.

Four simple rules for leadership in the digital age:

1 Keep on creating new incentives and challenges!

So that employees don’t get stuck in routine paths, they constantly need new incentives and concrete challenging tasks. This is the only way to excite the emotional regions in the brain, which only come to rest when serious solutions emerge. In this way, not only thinking but also employees remain agile. At the end of the 70s, job rotation was the model of choice – in other words, the model of regular job changes, which today, with lean management thoughts, is again being used in companies.

2 Making the company’s know-how accessible and networking it!

We know this from interdisciplinary research with outstanding and above all unexpected results. We know that the brain is best at finding solutions when many neural networks that are far apart from each other are activated simultaneously. In the solution-finding process, they are then reconnected with each other. Not primarily, to invent something new, but to combine existing, separate knowledge into new solutions. For a company this means: It has to continuously re-mix the different existing know-how in the company. For example through coached know how transfer points in order to set up targeted cross-departmental teams for specific solution finding. Or simply bring the product developers together with the users and, conversely, inspire users to get involved in product development.

3 Understand mistakes as an opportunity!

Make “learning from mistakes” one of your company’s guiding principles. Avoid fear and insecurity, do not trigger the archaic emergency programs in the brain to generate only attack, flight or paralysis. Never block action-activating excitement patterns but use them for creative problem-solving processes. As a manager, avoid building up too high an expectation pressure, which would ultimately result in a fear of failure. So make sure that employees feel as little pressure and fear of failure as possible. Learn to regard mistakes as a challenge for finding solutions. This means: Those who punish mistakes deprive themselves of the chance to find solutions.

4 Create a motivation culture through positive experiences!

All networks in the brain that are activated at the same time are linked to each other. This is the reason why the brain links certain emotions with certain feelings, smells, people or situations. For managers this means that the employees must link the manager with positive experiences. For example, by giving timely and comprehensible positive feedback, if necessary with hints for improvement. Show interest in your employees and support them with advice in difficult situations. Through positive feedback, they create a WE feeling and increase the willingness to perform and the commitment of the employees.